FAQ

We have designed our Trade Divergences app to meet a specific goal — to be simple enough for any trader to use yet powerful enough to be included in the most advanced trader’s arsenal. You should find the answers to any questions you may have below, but if you think of one we haven’t answered please contact us at support@plumsquare.com and we will get you the information you need.

Definition taken from Elder’s book on divergences: «A bullish divergence occurs when prices trace a bottom, rally, and then sink to a new low. At the same time, MACD-histogram traces a different pattern. When it rallies from the first bottom, that rally lifts it above the zero line, 'breaking the back of the bear'. When prices sink to a new low, MACD-histogram declines to a more shallow bottom. At that point prices are lower, but the bottom of MACD-histogram is higher, showing that bears are weaker and the downtrend is ready for reversal. MACD-histogram gives a buy signal when it ticks up from its second bottom." The opposite is true for bearish divergences. For more details see Elder’s book — Two Roads Diverged: Trading Divergences (Trading with Dr Elder).

No. Our experts manually go through all stocks listed on NYSE and NASDAQ and check for divergences, then update lists of tickers with divergences daily. The app downloads these lists and presents them in a easy to understand format.

We report three types of divergences in the app: Divergences in price and MACD-histogram, OR Divergences in price and MACD lines (stronger signal), OR Divergences in MACD-histogram and MACD-lines (strongest signal).

We scan for stocks listed in NYSE and NASDAQ with average daily traded volume of more than 500,000 shares. We look for stocks that made a new 90-day high or low while demonstrating a divergence as listed above.

No. Our app is not a trading system and we do not make recommendations on trading. However, divergences are one of the strongest indicators in technical analysis and generally yield high-probability trading scenarios.

Our app is for swing traders (trades which lasts several days to several weeks). If a divergence works, a realistic profit target would be at the upper channel for long trades and the lower channel for short trades. While some stocks do go up or down for a long time after a divergence, most of them provide short-term but high-probability trading opportunities.

The app is free to download. Once installed, you will be able to see all previous divergences except for the previous week. This will allow you to test the previous divergences against real-life results and decide if the app fits into your trading strategy before you subscribe.
The subscription is managed by the Apple in-app subscription engine and it does not provide any money-back guarantees or trial periods.